Women’s pensions will be surpassed by men’s in every single UK job sector when they retire, a new study reveals.
Some of the biggest gaps are in the top women’s employment sectors – health care, pharmaceuticals and social care – according to analysis of work pots belonging to millions of pension savers.
According to data from financial giant Legal & General, the average pension fund of women aged 55 and over is £12,000, less than half that of men, who average £26,000.
Those amounts include only the pots of its own scheme members, no other private or state pensions.
Gender gap: in every industry, women retire with a lower average pension than men
Previous research has consistently shown that women have much lower pensions than men, as lower wages and unpaid care work affect their ability to save for old age.
But the in-depth L&G survey reveals the magnitude of the pension shortfall for female workers aged 55 and over, regardless of the industry they work in, ranging from 59 percent in healthcare to 13 percent in courier services – see below.
Source: Legal & General
“There are many reasons for the gender pension gap, ranging from women who hold fewer senior positions and are paid less, resulting in lower pension contributions, to the fact that they are more likely to take career breaks due to caring responsibilities,” says L&G.
Read here what the impact is of different maternity benefits on pensions and how you can prevent this here.
L&G also cited separate research it conducted showing that 28 percent of women are confident in their ability to make decisions about their retirement, compared to 48 percent of men.
About 22 percent of women are confident in managing investments versus 41 percent of men, and 56 percent of women feel on top of their savings versus 67 percent of men.
The above numbers reflect attitude rather than measurable financial knowledge or skills. However, lack of confidence can prevent people from taking action to improve their finances.
L&G says the significant gender pension gap is serious in itself, but widens when life expectancy is taken into account.
Official statistics show that life expectancy at birth in the UK is almost 83 years for women and 79 years for men. This means that women generally have to achieve a lower pension for longer.
Tips to increase your chances of a decent pension
Katharine Photiou, Commercial Director of Labor Savings at L&G says: ‘We’ve all heard about the gender pay gap, but few talk about the gender pay gap, despite the fact that so many women are affected by it.
“This shows that more needs to be done to increase engagement with pensions, especially among those who feel less confident and who may need help making financial decisions.
Millions of people would benefit from a wider range of support services to make more informed decisions about their savings and investments.
“But this support needs to be personalized to make a real shift, and this is where government and business need to work together.
‘Pensions may seem complicated, but it’s a regular savings plan with some tax benefits. We need to demystify pensions and go back to basics.’
L&G has called on companies to disclose their gender pension differences, and the government to take action, including lowering the auto-enrollment age from 22 to 18 and giving couples more flexibility to pay each other’s pensions. .
It also proposes to encourage wage and job development for part-time workers, promote the inclusion of pensions in divorce proceedings and prioritize childcare facilities to help women work longer hours.
What can you do to increase your pension?
L&G suggests doing the following to increase your pension fund.
– Contribute as much to your pension as possible – and start early. Compound interest remains vastly undervalued and poorly understood by both men and women.
– Check the costs on your historical pension pots. See if consolidating your pots brings them down. Read This is Money’s guide here to see if merging pots will benefit you.
– Plan for a future full of Saturdays. Everyone underestimates how much they need.
– To check how much your AOW will be and when you get it. If it doesn’t support your ideal lifestyle, plan how to fix a deficiency.
– Put a little more in your pension with every pay increase. Read This is the money guide to making extra payments in your pot here.
– Discuss your retirement planning with your partner. Make sure you are aware of each other’s savings plans, premium limits and that you are both on the same page.
– Run a regular Midlife APK. It helps you see how your finances are doing and also allows you to monitor your work and health well-being.
– Keep an eye on your pension regularly, so that you are in control and save for your ideal future.
What is L&G’s gender pension gap?
According to the company, there is a 60 percent gender pension gap for L&G employees when they retire and an average 32 percent gap for current savers.
It plans to review the gaps annually to ensure progress is being made, by reviewing internal policies and making changes, such as better support for menopause and a review of paternity and shared parental leave.
The company adds: “L&G is committed to raising the profile of the gender pension gap in the companies it invests in and will continue to collect data to incorporate it into its stewardship business in the future , as well as partnering with regulators, trade associations and other providers to provide longer-term solutions.
L&G has set up a working group with 14 of its largest clients with 535,000 members and assets of over £7 billion to help them tackle inequalities in their own pension schemes by the end of 2022 and plans to continue this group in 2023. expand.’
How to get your pension on track if you’re worried it’s falling short
If you’re worried about your retirement and having enough, read a full 10-step guide to solving it here.
First, research your existing pensions. Broadly speaking, you should ask schemes for the following:
– The current fund value
– The current transfer value – because there may be a penalty to move
– Whether the pension is part of a final salary or defined contribution scheme
– If there are guarantees – for example a guaranteed annuity – and if you would lose them if you moved the fund
– The pension prognosis at retirement age.
You can use a retirement calculator to see if you have enough – find This is Money’s here.
You need to add the forecast figures to what you expect to get in state pension, which is currently £185.15 a week or about £9,600 a year if you qualify for the full new rate.
Get an AOW Forecast here.
If you’re tempted to merge your old pensions, here are some tips to help you decide.
If you’ve lost track of old pensions, the government’s free tracking service is: here.
Pay attention when you search online for the Retirement Discovery Service, as many companies with similar names will appear in the results.
These also offer to seek your retirement, but try to charge or thrash you for other services, and can be fraudulent.
If you’re in your twenties, we’ve got a special retirement guide here. Self-employed people can find out how to arrange their pension here.
Women, who often miss out because they receive lower wages and do unpaid care work, can find out here how they can increase their pension.
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